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JIM SCIUTTO, CNN ANCHOR: Right now, mandatory evacuations are underway as Hurricane Arthur spins towards North Carolina. Wind gusts already reaching 110 miles per hour and the risk of deadly rip currents extends up and down the East Coast. Right now, a hearing is about to get under way in this courtroom for a Georgia father charged with murder and child cruelty after his son was left in his SUV on a 92-degree day. And right now, the closing bell has just rung ending a short but historic day at the New York Stock Exchange. The Dow passing the 17,000 mark for the very first time.

Hello, I'm Jim Sciutto reporting again today from Washington. Wolf Blitzer is off today. The first hurricane of the Atlantic season is gaining strength and speed as it barrels up the East Coast on the busiest holiday travel week of the summer. Right now, Hurricane Arthur is churning off the coast of South Carolina. It is a category one storm with 90 mile an hour winds, but forecasters expect Arthur will become a cat 2 with 105 mile an hour winds before making landfall on North Carolina's outer banks. That's expected to happen overnight. Dangerous conditions are possible along much of the East Coast now just as millions of people hit the roads and airports for the July Fourth weekend -- myself included. Alina Machado is on the Carolina coast and Chad Myers is tracking Arthur from hurricane headquarters in Atlanta. Chad, if I can, I want to start with you. Where is the storm headed right now and as it makes landfall how bad do you think this is going to be?

CHAD MYERS, CNN METEOROLOGIST: It's moving north. It's going to turn to the northeast. It's going to make a glancing blow at Wilmington, North Carolina. But that means it's going to slam into Carolina beach, into Wrightsville Beach, into Surf City and all the way up the Carolina coast. This couldn't be worse case than what we have right now with a category 2. Sure it could be 3 or 4 but we're going to have an eye and an eye wall on land for many miles, maybe 50 miles. Usually a hurricane will come on shore, you get ten miles worth of damage and it's over. This is going to skim along the coast all the way through here for miles and miles and miles taking its onshore wind and also its onshore beach erosion right there along the Carolina coast. It couldn't be any worse than that. We'll show you the radar here in a second. We do have now hurricane warnings all the way from the Virginia/North Carolina border, all the way down to Morehead City. If you're down to Surf city, just pretend there's a hurricane warning. It's close enough. This thing is going to be 100 miles per hour right over the top of you. I consider that a hurricane.

There you go right there. That's the storm getting an eye well defined now, air coming in from the ground and going up through the eye wall storms here and blowing out the top. The storm continues to get bigger, continues to strengthen in vary warm water, no shear to tear it apart. There it is. Wilmington, you're next, all the way up here along the beaches, a lot of beach erosion as a category 2, 100 mile per hour storm.

Our Alina Machado is right there. We have another crew right here. We have Indra Petersons and Joe Johns right there and look at that. We can't even believe how that storm is going to go right along there. You need to be inside if you can be and not certainly in the water. We're not going to have our reporters in the water, that's for sure. Jim?

SCIUTTO: Well, one measure of how bad the weather is now, our Alina Machado, we can't go to her now, it's difficult getting a signal out of there - we are going to try again later. But Chad, I want to ask you, if you're not living in the path of this storm, but you're planning to travel up the East Coast as many people are planning to do how bad is that weather going to affect, you know, those key route I- 95, the airports along the coast. Is it going to disrupt things?

MYERS: I-95 inland far enough will be OK. But if you try to take any coastal highway along North Carolina it's going to look like this. We just got permission to use this, this is surfchecks.com or we also have obxcam.com. You'll see all day and all night here on CNN. The waves here six to ten feet, the winds here at least 40 miles per hour. Every time a squall comes in you're talking about that coastline that you're talking about right through here becoming, honestly, you can't see anything. There will be wind and waves through here at 80 miles per hour. Don't try to get from Morehead City down to Topsail beach or Morehead city all the way down even toward Wilmington. These are the areas right along the coast, Jim, that are going to be hit so very hard. Literally almost whiteout conditions with spray and wind at 100 miles per hour wiping out your visibility, no travel anymore, it's done. Get out of the way now, stay inside, it's -- the storm is coming on shore too quickly now.

SCIUTTO: Good advice, Chad. As you're saying, don't even risk it in that key area down there and keep aware as the weather develops. Thanks very much, Chad Myers at the weather center in Atlanta.

Officials in North Carolina aren't taking any chances themselves with Hurricane Arthur. They're telling residents and tourists to prepare and in some cases that means packing up and getting out. Joining me now by telephone, Gregory Baker, he is with the North Carolina Department of Public Safety and Law Enforcement. He's the commissioner. Mr. Baker, as you're preparing for this enormous task at hand for you making this call as to whether people should evacuate, what are you most concerned about?

GREGORY BAKER, NORTH CAROLINA DEPT. OF PUBLIC SAFETY: Well, specifically that. As you know, Jim, most of the serious injuries and deaths are related to storms like this or because of flood situations, high water, storm surge and getting out in front of this is critical to us.

Our governor declared a state of emergency yesterday which enabled some of our state resources. It put our county officials that we rely on to make these decisions on evacuation orders. It put them on notice. And we are very happy that in Dare County they went ahead and declared a mandatory evacuation for Hatteras and Ocracoke Island as indicated that are in the direct path of this storm. So that's critical to us when we enable our North Carolina National Guard, our highway patrol to start the process of evacuation while working closely with North Carolina Department of Transportation, the ferry system, getting people off of these barrier islands and safe in, safely inland. Tremendous help to us getting out in front of this early.

SCIUTTO: Now, Mr. Baker, I know one of the challenges when you're ordering these evacuations is that sometimes people don't listen. They stay. To your knowledge now, are people heeding the warnings and getting out of there?

BAKER: There's always a few, Jim. Yes, the majority of people are heeding the warning. Again, I think not to be repetitive, but getting out in front of this, letting people know early the danger that this storm represents as it strengthens and we certainly anticipate that it will continue to strengthen and those barrier islands along the outer banks are in the direct path of this so, yes, it's critical but there is always going to be a few, that's unfortunate. Once we evacuate all of those that are willing to go then, of course, after that it becomes a search-and-rescue and often times recovery mission after that.

SCIUTTO: Chad Myers, you probably heard -- was showing the path of this storm going forward and it does look like it's going to take a path out to sea towards the east. Does that make you any less concerned? I mean this is, of course, after landfall. Any less concern about how long this is going to be a threat to North and South Carolina?

BAKER: Well, we're thankful that it's a quick-moving storm and we're also thankful to be on the western side of that storm. Obviously, we are preparing for the high winds as he mentioned, as Chad mentioned, the beach erosion and I think a critical component for this and understanding, again, the need of getting out in front of it early. The July Fourth weekend there's going to be a tremendous loss of revenue associated with these communities that rely on tourists, but to make the call between tourism dollars and safety, they've done that, we appreciate that. If there's one thing to be thankful for it's moving quickly and it appears to be moving to the north-northeast so we're happy about that.

SCIUTTO: Well, listen, good luck to you, Mr. Baker. We know you have a big challenge for your community there and as you say, also an economic cost beyond the danger from the weather. I want to go back now to Chad Myers in Atlanta because yet another weather warning, this time, though, tornadoes?

MYERS: Yeah, and you just talked about how we couldn't get to Alina Machado because the weather was so bad because we knew that there was a waterspout moving on shore right where she was, central New Hanover County now, a tornado warning, water spout coming on shore about six miles east of Wilmington moving northwest at 35. And not that far from the UNCW campus. So if you are in that area, not only do you have wind, but you have the potential for tornadoes again. Any landfall, large cell in any one of these spinning storms right there. Any time there's a yellow or a red coming at you, any one of those storms could make a tornado and we're going to have that pretty much all day long, Jim.

SCIUTTO: It's incredible to see that right now. Thanks for the warning, Chad, as always, stay with CNN all day for the latest on Hurricane Arthur. We're going to have much more coverage ahead. Also ahead, another record day on Wall Street. We'll have a live report from the New York Stock Exchange on what exactly pushed the Dow above that historic 17,000 mark.

(COMMERCIAL BREAK)

SCIUTTO: It was a short trading day on Wall Street ahead of the July 4 holiday, but still one for the record books. With the Dow cracking 17,000 for the first time, it was helped by better-than-expected jobs report for June and President Obama spoke about it just a short time ago.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: We've now seen almost 10 million jobs created over the course of the last 52 months and it should be a useful reminder to people all across the country that given where we started back in 2008 we have made enormous strides thanks to the incredible hard work of the American people and American businesses that have been out there competing, getting smarter, getting more effective and it's making a difference all across the country.

(END VIDEO CLIP)

SCIUTTO: Alison Kosik joins us now from the New York Stock Exchange. Alison, you hear the president there, 10 million jobs, 9.7 million jobs over the last 52 months. You have the market-setting record. I mean you hear these good economic numbers, but for so many Americans they're not feeling so good, so confident economically. Why that disconnect?

ALISON KOSIK, CNN CORRESPONDENT: And that's a very good point. I mean you have to also think about what the president said. He's talking about the positives that we're seeing now but this has been a recovery that's been slow going. I mean, even you look at this jobs report which is no doubt about it very solid. You can even find problems in it. One of the big problems that I find is the labor force participation rate, meaning the number of people who are either working or looking for work. I mean, in the labor force that level is absolutely not where we want to see it. It's at the lowest level since the late 1970s and that's people who have literally given up looking for work. That's one of the disconnects. The other disconnect is the fact that a lot of people, you look at --

we talked about the Dow's 17,000. It's a huge milestone for the Dow. There's a disconnect there. You know, a good portion, more than half of Americans, aren't even invested in the stock market so they're not feeling the headline of 17,000. A few other things that Americans will feel on a day to day basis. Their incomes. Although we did see salaries go up in this jobs report, they're not really keeping pace with inflation.

Also, costs for food and energy for example, they have certainly risen. Today, in fact, gas prices are at a six-year high. So these are things that take consumer spending away from making maybe discretionary purchases and really keeping their pocketbooks a little more tightly closed. And that, in turn, hurts the economy because consumer spending makes up the lion's share of economic activity. So those are the realities even though for sure momentum is building in the jobs picture, Jim.

SCIUTTO: Yes, we've got to hope that those good times start to filter down so more people start to feel it. Thanks very much to Alison Kosik at the New York Stock Exchange, breaking the numbers down for us.

Now we want to turn overseas to Iraq and a new assessment from the Pentagon. Listen to this from Joint Chiefs Chairman General Martin Dempsey just a short time ago.

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GEN. MARTIN DEMPSEY, JOINT CHIEFS CHAIRMAN: It's not 2006. This is a very different approach than we've - than we've taken in the past. I mean assessing and advising and enabling are very different words than attacking, defeating, and disrupting. We may get to that point if our national interests drive us there. If ISIL becomes such a threat to the homeland that the president of the United States, with our advice, decides that we have to take direct action. I'm just suggesting to you we're not there yet.

(END VIDEO CLIP)

SCIUTTO: General Dempsey also said that ISIS forces are stretched thin after their initial gains but that Iraqi forces don't yet have the capabilities to capitalize on that.

I want to bring in our own Barbara Starr from the Pentagon.

Listening to General Dempsey there, interesting because he seemed to leave the door open to something that the president has said to this point U.S. troops would not be doing in Iraq, and that is something of a combat role if, as General Dempsey said, U.S. interests were seen to be threatened. Do you think that's significant?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: He - I do. I mean I think that General Dempsey, as the chairman, made sure in this press conference with Defense Secretary Chuck Hagel that he did not get boxed in in any way. He absolutely left every military option open. He says, we're not there yet. He says this is not the war that we had fought back in 2003 all the way to 2011. Right now it's just military advisors. But he leaves the door open if the insurgents begin to pose a threat to the United States.

He also had -- was pretty grim, I would say, about the ability of the Iraqi forces to go retake territory in the north at this point, to take back those ISIS strongholds. I want you to listen just for a minute a little bit more of what he had to say about all this.

(BEGIN VIDEO CLIP)

DEMPSEY: It really is about deliberately first preserving options and then developing options. And if you're asking me, will the Iraqis at some point be able to go back on the offensive to recapture the part of Iraq that they've lost, I think that's a really broad campaign- quality question. Probably not by themselves. Doesn't mean we would have to provide kinetic support. I'm not suggesting that that's the direction this is headed.

But there -- at any military campaign, you would want to develop multiple access (ph) to squeeze ISIL (ph). You'd like to squeeze them from the south and west. You'd like to squeeze them from the north and you'd like that squeeze them from Baghdad. And that's a campaign that has to be developed. But the first step in developing that campaign is to determine whether we have a reliable Iraqi partner that is committed to growing their country into something that all Iraqis will be willing to participate in. If the answer to that is no, then the future is pretty bleak.

(END VIDEO CLIP)

STARR: And what Dempsey goes on to say, if the answer is no, if there's no inclusive Iraqi government that basically everything the U.S. is going to try to do won't work, won't be worth it. So right now it's quite interesting here at the Pentagon. Words being picked very carefully here by the military making sure they leave all the options on the table for President Obama to choose, if he chooses to, not shutting the door to anything really, just now making clear the U.S. advisors that are there are not there in a combat role, at least not for now.

Jim.

SCIUTTO: Well, pretty bleak assessment, as the general said, of the Iraqi forces' ability to respond. Thanks very much to Barbara Starr at the Pentagon.

Coming up next, protesters with rocks and police with rubber bullets go at it on the streets of Jerusalem. We'll have the latest fallout from the deaths of a Palestinian teen and three young Israelis.

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SCIUTTO: Anger spilled over into the streets of Jerusalem once again today. The death of a Palestinian teenager has ignited tensions still simmering after three Israeli teens were killed. Dozens of Palestinians threw stones at Israeli security forces. They responded with rubber bullets and stun grenades. At least 10 Palestinian protesters were injured. Senior international correspondent Ben Wedeman joins us now from Jerusalem.

I know, Ben, you've been in the middle of this since the start of it all. Have you sensed the temperature coming down at all or is this still a very tense situation?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: No, no decrease in the temperature, Jim. Things are still very tense in east Jerusalem specifically. The neighborhood of Shofat (ph) we saw is yet again, for hours upon hours, Palestinian youth throwing rocks and bottles at Israeli police who fired back with tear gas, rubber bullets and stun grenades. This really has been going on almost around the clock. Overnight, there were even more clashes, not just in that part of Jerusalem, but in a variety of other neighborhoods of the city as well.

They're -- really until, for instance, we're waiting, Jim, for the body to be brought of 16-year-old Mohammed Abu Khudair, who his body was found yesterday morning in a Jerusalem forest. The family is waiting for the body to come back and then there's going to be a very large funeral. Now, they did request that the funeral procession be allowed to go from the Hadamasharifer (ph), the temple mount, back to their home in northern Jerusalem. The police apparently refused out of fear that this could result in even more civil disturbances. So probably that funeral will be held in their neighborhood. But nonetheless, we are expecting thousands, if not tens of thousands to people -- of people to turn out for this funeral and afterwards clashes are inevitable.

Jim.

SCIUTTO: Another potential flash point. Just to remind our viewers, this is not in the West Bank or in Gaza Strip, this is in Jerusalem, a place a lot of people visit where this is taking place. I know you spoke to the father of the Palestinian teenager who was killed. Who does he blame for his son's death and what is he saying about the violence that this has sparked?

WEDEMAN: Well, he is blaming Israeli Prime Minister Benjamin Netanyahu, saying that he's whipped up emotions among Israelis and that he's done very little to punish those who have been involved in attacks upon Palestinians. Keeping in mind that just hours after the funeral took place for those three Israeli teenagers whose bodies were discovered Monday afternoon, that there was a very large march of Israelis through the center of town resulting in attacks on at least six Palestinians. So there's a feeling that emotions are extremely high on both sides.

Now, the father did not condemn the clashes that are really happening just around the corner from his house and I think they see it within the context of the decades-old Israeli Palestinian conflict.

Jim.

SCIUTTO: Yes, someone's got to step in there and turn down the temperature, encourage people to go home. Thanks very much to Ben Wedeman live in Jerusalem.

Still to come, it is a case that has made national headlines. A toddler dies after his father leaves him in a hot SUV for seven hours. A judge will hear testimony on whether to grant Justin Ross Harris bail. We are there live.

And the first hurricane of the Atlantic season is on track to make landfall right on the Fourth of July. We'll tell you where it is likely to hit and how strong those winds will be. That's coming right up.

We have breaking news in this important case from Georgia where a dad accused of deliberately leaving his 22-month-old son in a car for seven hours. That hearing about to begin. Our Ashleigh Banfield is there live. She's host of "Legal View."

Ashleigh, tell us - tell us what's going to happen now.

ASHLEIGH BANFIELD, HOST, CNN'S "LEGAL VIEW": So, Jim, this is that first gatekeeper hearing, so to speak, about how much evidence, how much investigative evidence the police and the prosecutors are actually holding in their arsenal against that man. Do they have enough to actually proceed past the magistrate and take this case to a grand jury so that a grand jury can actually indict.

Let's just listen in for a moment.

UNIDENTIFIED MALE: Felony murder on the 18th day of June this year at 2955 Bakersville Road, Atlanta, Cobb County, Georgia.

All right, you may proceed. Who's going to - Mr. Boyd (ph).

UNIDENTIFIED MALE: Yes, your honor.

UNIDENTIFIED MALE: You may proceed, sir.

UNIDENTIFIED MALE: Thank you.

Detective Stoddard, would you please introduce yourself to the judge by telling your names and spell it so the court reporter gets it correct.